Hello, I'm Liv Garfield, Chief Executive of Severn Trent, welcome to our half year results presentation. You'll see that I'm stood on the side of the River Leam, which is one of the two bathing site locations for our Green Recovery program. During the course of today, I'll bring to life how important those locations are for us, whether it's to support our river pledges, whether it's our commitment to nature, or our long-term RCV growth. One of the advantages of the virtual world is we get to intersperse today's presentation with a couple of really brilliant video deep dives into key topics.
One of which is going to be water resilience, very topical after this summer. The second is going to be bringing to life our launch of our societal strategy, our ambition today to support 100,000 people out of poverty by 2032. You won't quite believe it, we're halfway through the AMP, two and a half years in. As such, I thought I'd start with a couple of personal reflections. I think operationally, our colleagues have worked flat out 365 days a year and delivered some brilliant operational excellence. Across almost every measure we've seen really strong improvements. Don't forget, that's having withstood record-breaking weather and of course, a global pandemic to boot. If we think about our capital program, our teams have done a really fantastic job.
That fast start has really supported us. We're on track for our core program and Green Recovery. Again, that's in spite of some of the supply chain constraints and the global pressures in terms of pricing increases. What I love as well is that we've really stepped into the space to support our customers. I think it's fair to say that the U.K. hasn't seen financial challenges like this in a generation, and I'm loving how much we've been able to step in and support customers that might be struggling to pay. If you look back at AMP6, we were supporting about 60,000-70,000 customers. If you look now, we anticipate supporting 315,000 customers with their bill by the end of AMP7.
Of course, this has been a period of time when British business has had to prove itself to be very resilient. I think Severn Trent has done that really well, delivering for all of our stakeholders and continuing our journey towards our strong, bright future. With that, I'd like to share my thoughts on the first six months' worth of highlights. Operationally and financially, it's been a strong six months, that's why today we're pleased to be guiding to double-digit RoRE for the year. That's supported by our at least GBP 50 million worth of ODI performance as we continue that operational excellence, also firmly assisted by a strong financing performance, which James will talk about in a little bit more detail.
Water has performed strongly across the piece, but actually waste has continued its great journey as well, and that means today we're able to share that we're on track to be four-star status again this year. That'll be for the fourth year on the bounce, which will be the first time anyone's achieved that. We're delighted that that waste performance has actually supported us with excellent progress on our river pledges, and we're ahead of track on the work we announced just in March, which was a sector-leading announcement and has really guided the path of the future. All of this investment, of course, is creating strong, growing RCV.
Actually, I'm delighted now to share that we believe that the nominal RCV growth will be a 36%. This is going to be our largest RCV growth period of any AMP period in the course of our history. With that, I'll hand back to James in the office to share his views on the financials.
Thank you, Liv. Today, I'm pleased to share with you a set of results that reflect a robust financial performance, a strong balance sheet and funding position, and promising prospects for future growth. Let's turn to the highlights. In the first six months of this year, we've worked hard to keep tight control of our costs, enabling year-on-year group PBIT growth and giving us confidence we can deliver our AMP7 investment plan in line with our allowance. This, together with our ODIs and a strong financing performance, means we're pleased to be guiding to double-digit RoRE for this year. Our balance sheet is strong, with regulatory gearing of just 58%, comfortably below the sector average, and supported by stable investment-grade credit ratings, providing the capacity needed for our future investment plans.
I'm particularly pleased to have agreed the 2022 valuation for our main pension scheme, with unchanged contributions and an agreed new mechanism to return funds as and when the scheme goes into surplus. Finally, having delivered GBP 50 million over the last five years, I'm pleased to announce an increase in our property profits guidance from GBP 100 million by 2027 to GBP 150 million by 2032 to deliver an average of GBP 10 million a year through and beyond AMP8. Let's turn now to our regulated water and wastewater business.
Turnover was up GBP 91 million year-on-year, the largest drivers being the recovery of revenue under-collected in the first year of the AMP, an extra GBP 17 million of HS2 diversions income, which is offset in RE, and an increase in bio-resources income following this year's higher wholesale energy prices. Of course, these higher energy prices also flowed through to our operating costs, which I'll cover in more detail in a moment. Excluding power, we've maintained operating costs in line with inflation, despite some lines increasing at a much higher pace. For example, chemical costs, which are strongly correlated to power prices, were up over 60%. We've worked hard to offset this pressure and find other efficiencies to keep costs in check.
Our bad debt charge was 1.9% of household revenue, benefiting from our strategy of helping customers who need our support before they fall into arrears. Liv will shortly give more detail on the good progress we've already made in expanding our affordability schemes. The GBP 23 million increase in RoRE mainly reflects the PBIT neutral HS2 diversions activity I mentioned previously. Following high levels of capital expenditure in the last few years, our depreciation charge grew by GBP 7 million. Taken all together, our regulated PBIT was marginally up on last year at GBP 243 million. Turning now to our business services division, whose steady growth over a number of years means it has contributed GBP 31 million to the group's EBITDA this half. Green Power is maximizing output from its assets with its anaerobic digestion plants running at 96% efficiency.
Our operating services business continues to grow, winning new projects and delivering a great performance on its main long-term contracts. In our property business, the GBP 51 million PBIT already delivered since 2017 has enabled the construction of more than 1,500 new homes and valuable employment sites for our region. Having assessed the next phase of development opportunities in our large land portfolio, we're able to announce today an extension to our property PBIT guidance to GBP 150 million by 2032. At the beginning of AMP6, we made the decision to invest in growing our energy generation capacity, meaning we now generate the equivalent of over 50% of our energy needs. This strategy continues to deliver significant benefits, helping us to increase profits, reduce our exposure to wholesale energy market volatility, and lower our net carbon emissions.
This half year, we've increased output by 16%, which with recent higher energy prices, means the combined revenue growth from bio resources and Green Power was up around GBP 22 million. In addition to the protection provided by self-generation, we also use financial hedges to reduce P&L volatility, and we started the year with 90% of our exposure hedged. This combined hedging strategy has reduced the impact of higher energy prices on group PBIT to around GBP 19 million for the first six months. We expect the impact to be limited to around GBP 50 million for the full year, in line with the guidance we issued in May. The majority of our energy spend is in the 50/50 TotEx sharing price controls.
Once this sharing is taken into account, the impact of higher wholesale energy prices on our group return on equity this year will be broadly neutral. Let's turn now to our financing strategy, which is providing resilience and outperformance in today's stormy economic conditions. During the first couple of years of AMP7, we decided to lock in our upper quartile financing position, today, around two-thirds of our debt is at fixed rates with only 7% floating, providing excellent protection in a rising rate environment. Our cost of debt is much less exposed to rising inflation than most in the sector, with only a quarter of our debt index linked, compared to a sector average of 60%. We've always carefully considered the level of index-linked debt we hold, enabling us to weather periods of relatively low inflation and significantly outperform when, like this year, inflation is higher.
Through such active treasury management, we've delivered financing outperformance for each of the last six years. Even though the cost of new debt is now increasing, we've continued to outperform the iBoxx-based allowance, which is also now rising and providing a good degree of regulatory protection for our future financing performance. Our credit ratings remain strong. We have GBP 1.2 billion of committed facilities, and we work hard to access a broad range of debt markets, raising GBP 400 million of funding so far this year. I was pleased to publish our updated sustainable finance framework in July, maintaining our attractiveness to ESG-focused debt investors. Let's turn now to RoRE. Following a good first half, I'm pleased to guide you to a double-digit return for the full year, the best year of the AMP so far.
Looking at the individual levers of outperformance, our net ODI performance continues to be strong. As Liv will talk you through shortly, we expect to deliver at least GBP 50 million in net rewards this year, despite increasingly stretching targets. We're maintaining this operational outperformance while mitigating cost pressures across our capital program, holding TotEx in line with our allowance. We now have one of the lowest costs of debt in the sector, which combined with this year's inflation, will result in significant financing outperformance. We've been an upper quartile RoRE performer since the beginning of AMP6. We're confident we can repeat that this year, and we are working hard to keep doing so for the remainder of the AMP.
With almost GBP 3 billion of core CapEx in our PR19 plan, plus our GBP 566 million Green Recovery program, we're growing our RCV by almost 11% in real terms. After adding the impact of inflation, this growth increases to 36%, which would make AMP7 the highest growth period in our history. This growth will increase our RCV by GBP 3.4 billion, and our strategy of maintaining only around a quarter of our debt in index-linked format means a greater proportion of that RCV growth will benefit shareholders with every 1% of inflation above the PR19 assumption, increasing equity returns by around 2%. We know even more investment will be required in the future to accommodate our region's growing population, mitigate and adapt to climate change, and meet tightening environmental standards.
Our proven ability to deliver scale programs together with the required capacity in our balance sheet positions us well to deliver investment and growth beyond AMP7. Let's turn now to the key points in our technical guidance for this year, which is broadly unchanged other than for the impact of higher expected inflation on in-year interest charges, which I'm now expecting to be between 40% and 45% higher year-on-year. Much of this inflation is driven by higher energy prices, but our effective hedging strategy means I'm maintaining guidance of a GBP 50 million increase in group net power costs. We're continuing to expect at least GBP 50 million of in-year ODIs, and I'm pleased to also guide you to GBP 40 million-GBP 50 million in end of AMP ODIs, which we expect to earn in full year 2025.
I've also added some new guidance for this year's RoRE and updated our long-term property profit guidance to GBP 150 million. Finally, a reminder that our dividend for the year will be 106.82 pence, with the half year dividend payment of 42.73 pence due in early January 2023. To close, at this halfway mark of the AMP, we can look ahead with increasing confidence to AMP8. We continue to generate strong real returns for our investors, guiding to double-digit RoRE this year. We've maintained strong financial performance in tough economic conditions through a well-managed capital program and disciplined cost control, supported by our natural group energy hedge. As we craft our PR24 plans, we know efficiency will be key to success, and we're ready for the challenge.
Our financing strategy is delivering both significant outperformance today and balance sheet capacity for our future capital investment program. It's been a tough but rewarding six months, and indeed a strong AMP so far, and I'm confident that we have the right building blocks to continue to deliver continued outperformance in this AMP and beyond.
Thank you, James, for bringing to life our financials. The eagle-eyed amongst you will notice I've moved further along the River Leam now. Behind me is a really important location. It's where we've got some of our fixed river monitors. Also where our wonderful river rangers, in this location, Zara and Siobhan, pop along each day, take samples, and make sure that we know the river quality is exactly that lovely quality we would expect it to be. During the course of this five-year period, we're going to invest in actually upgrading 2,000 km of river. We'll also install 500,000 m. We'll also make sure we have our first ever scale catchment management surface drainage location in Mansfield, bringing to life a whole heap of nature-based solutions learning for the sector for the first time.
Now, of course, the backshot to this capital investment is an era that has never been trickier. When you look at the supply chain constraints, it's even more impressive that the capital teams have done so well to be on track at this stage in the AMP. We've already either delivered or locked in the prices for 70% of our capital program. There's four things to bring to life. The first thing is that fast start when we got fast-tracked made a really big difference. When the rest of the world paused back in 2020, we actually kept going and kept delivering our critical infrastructure investment program. Secondly, we've really worked hard to insource and to have a 200-person strong design team. That gives us an advantage.
We've got that team poring over designs, working with our chief engineers team on solutions. There are some fantastic examples of value engineering coming to life every single day. We've also taken the decision to deepen our supply chain, to contract with new partners, giving us a wider number of people to have the expertise and to keep working on new projects with. Our brilliant procurement team took a fantastic call to actually buy advanced materials and components, meaning that we can keep going with all of our build, and at the same time, we've locked in some really strong prices. All of this added together is why we feel in such strong shape in terms of our delivery for our capital projects during the course of this year.
I'm gonna now hand over to a video, and it's gonna bring to life that whilst the day is a little bit grizzly, during the course of the summer, it was obviously super hot. We know that we'll continue to need to invest in ongoing water resources of the future with climate change creating many different circumstances that we need to consistently adapt to. What was really fantastic about this summer is the investment over the last few years really paid off. All of the hard work that the teams have undertook meant that we withstood some really tricky conditions and ended up delivering our customers a fantastic service in spite of that record-breaking climate situation. With that, let me hand over to the team to bring to life water resilience.
I'm Stephanie Cawley, I'm the head of water treatment. Firstly, we've been using our flagship Birmingham Resilience Project to modernize and improve water supplies to Birmingham. We've also revitalized and refurbished some of our older assets, such as our water treatment works in Staffordshire, to strengthen our network for these times when we need to give a little more. Not only are we investing more in our assets, we're also getting more out of our asset base. In fact, in the summer of 2022, we had the highest recorded number of boreholes online. The network control team have introduced new network operating models for certain areas to better control the movement of water between zones. This means it's seamless for our customers and helps us manage in peak summer demand.
We've committed to reducing leakage by 15% between 2020 and 2025, and we'll further halve it by 2045 to meet the needs of our long-term water management plan and our customers' expectations.
We're investing in a smart network to reduce the time it takes to find a leak. As part of this, we've installed over 30,000 acoustic sensors on the network and AI technology to help with the acoustic sensing and prioritize the largest leaks to get to first. Up to a third of our leakage is on the customer side network, on supply pipes and in customer premises. That's why this year we are surveying 30,000 home visits to look for things like leaky loos, which can leak between 200 and 400 liters a day. As well as assets in the ground, we're also using airborne technology to find leaks. We're using drones and satellites to cover large areas of the network that aren't normally accessible on the ground to look for changes in condition and the environment.
In the last five years, we've increased repairs on the network by 25%. We're currently repairing about 3,000 leaks a month. As part of this investment and this increase, we've taken on a number of apprentices into leakage. We've taken 75 new apprentices over a three-year period.
Recently, we've gone out with an all-region comms campaign. This focuses on talking to customers about cost-effective ways that they can save water, energy, and money this winter.
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Aside all of this, we've also sent out 1.9 million text messages and 1.6 million emails to make sure customers know what they can do to help us reduce demand. We've also recruited 45 door knockers, which are out in the community speaking to people about how they can save money, energy and water, and identify leaks in their home. When we carried out some independent research, we found that three-quarters of our customer base would prefer us to proactively engage them about water demand reduction, such as our demand management campaign, as opposed to enforcing a hosepipe ban. We're proud of the work we've done to minimize disruption to our customers this summer, working together to keep our wonderful water flowing. That was water resilience. Let's now talk about water quality.
What people don't realize is how important biodiversity can be to actually support us in extracting beautiful, pristine river-quality water through biodiversity investment along the river edge. What you can see now behind me is a really good example of biodiversity at play, supporting cleaner water. We're so committed to this that we committed to 5,000 hectares of biodiverse land as an improvement over the course of this AMP. We set ourselves ambition over a seven-year journey, and actually, with about four years to go, we're 90% through it, so we're well ahead of our performance in that space. ODI targets, quite rightfully, get trickier and trickier to deliver each and every year. They get more stretchy, and we have to work harder.
It's against that backdrop that I'm so pleased to report that 28 of the 33 measures are green at this stage, and that we're well on track for about at least GBP 50 million worth of ODI outperformance during the course of this year. If you add years one, two, and three of this AMP together, you'll get over GBP 200 million worth of ODI rewards, which actually is much higher again than what we achieved over the whole five years of the last AMP, which is great to see in three years we've outperformed that five-year period already. Of course, our customers are also receiving improved performance and service levels. Actually, the ambition we've got around this space is great to see. We've halved the number of low-pressure complaints since the start of the AMP.
We've actually also halved the number of water quality complaints over a six-year period. We're on track for that halving of pollutions that we set ourselves an ambition between 2020 and 2025 with our best ever pollution performance this year. Now, whilst we are the sector leaders on ODIs, nonetheless, we know there's more we can do. We're totally committed on a handful of measures, such as supply interruptions or external sewer flooding, to keep improving, to keep adapting and keep innovating until we really get to that excellence that our customers expect on every single measure all at the same time. Let's move on now to talk about environmental performance. There's three parts I wanna discuss here. The first is all around rivers and our river pledges. We launched those back in March. We've really set the standard for the sector.
Since then, we've done so much work that I'm not even in a position to actually share all of it with you on camera today. Instead, we've put all of that information on the website. I'm just gonna talk to you today about river pledge number one, which was to do no harm. There were two component measure parts to that. There was the RNAGs, which is reasons for not achieving ecological good status. Actually, we've made great progress there. From a little over a year ago, we were at 27% of the reasons in our region. We're now down to 17%. We're on track to our commitment to 0% by 2030, and we're continuing to do well with our investment plans of spending GBP 100 million a year to really continue to make strong progress in that space.
The other half of that measure was around combined sewer overflows. Something that's definitely been topical and discussed quite a bit since then. I'm pleased to share that we're on track for year-on-year improvement and firmly on track, if not ahead, of achieving an average of 20 CSO activations by the time we get to 2025. Moving on to the second part environment, it's all around the EPA four-star status. That is the measure that EA judges the sector against. Of course, it also ratchets up each and every year. We were super pleased to get that third year on the bounce confirmed in July, and as it stands now today, with a matter of weeks to go on the measure, we're actually on track again for a fourth year of EPA four-star status, something nobody has achieved in the sector to date.
The last topic in environment is around net zero. Net zero is a total passion for us. We've said quite openly we want to be net zero by 2030, and we believe to get there efficiently and effectively, one of the best things that we can do is to have global partnerships to learn from others. That's why I was thrilled to announce our global partnership with Melbourne Water and Aarhus Vand. As part of that, we're gonna be going live with our first wastewater net zero site in literally just a couple of years' time, which will be one of the brilliant learnings that will help all of the sector to transform its ambitions. You'll see that some of that lovely rain has arrived, which is brilliant for me. I do work in water, so the reservoirs are filling up nicely.
I'm gonna take us over now to one of the community spaces to talk about our community plans for this year. I've moved to now be stood in front of one of our community spaces in Leamington. We know that for us, right at the heart of our core offering is being really involved in our communities. We launched back in May a really exciting proposition around affordability. We're proud to have one of the lowest bills in the land. We're proud to have always supported customers that were struggling with financial hardship. We wanted to supersize it based on the financial backdrop that exists right now in the U.K. We're looking to support up to 315,000 customers their bill and up to 90% discount. Since we last spoke, we've made great progress with finding some of those customers.
We've also done an entire patch-wide campaign educating customers that it is available. We've changed the qualifying criteria to make it even more readily available for a larger number of customers. Now, the second thing we've been working on over the last few months in this community space is all around supporting people to be able to get out of poverty. There's gonna be a video now that brings to life exactly what that means and the types of innovations and activities that we're looking to do, and we know that they're gonna make a real difference. We know that our colleagues have bought into this program. We also know that our colleagues are more engaged than they've ever been before in the organization's direction.
We had our most recent engagement scores just a few days ago, and hot off the press, I'm pleased to share that we've got our highest engagement score to date, and we've seen that that is top 5% of utilities globally once again, and something we're super proud of. With that, let me hand to Neil.
For many in our region, life's harder than it's ever been before. As a large regional employer, we believe we can have a positive impact on our communities. We're launching a new plan to help 100,000 customers out of poverty by 2032. To do this, we're gonna be looking at the underlying factors that drive poverty and the interventions that have the biggest impact. Working with local councils and other like-minded organizations to make sure we can have the biggest impact possible.
For many people looking for jobs, either fresh from school or out of long-term unemployment or just looking for a career change, the first steps can be really daunting. This is why we're going to be offering 10,000 hours of free skills employability training. We already have a dedicated training facility, but for most people in our region, it is unrealistic to expect them to come to us. We'll pop up where they are, taking over unused retail spaces or community hubs. We will go where the need is most. Our research tells us that the best way to take people out of poverty is to prevent them from falling into poverty in the first place. Children who do not undertake any work experience while at school are 6x less likely to enter into meaningful work experience.
We're going to create new school partnerships and develop a brand-new work experience program. We're going to be offering 300 work experience placements to young people by the end of June 2023. We've already seen firsthand what an impact work experience can have. Here's just one example.
My name's Paige. I'm 23 years old. I'm from Coventry. When I finished school, I went to college, did my two years. I wasn't quite sure, like, what career path I wanted to do. I ended up getting a job in customer service. I kind of ran with that for a few years. It was just what paid the bills. I fell pregnant with Aiden. Everything changed my mindset because then I thought, I've got a little one to provide for now. Once you have a baby, you just want the best for them anyway. I thought, if I go to work and I'll go somewhere where I know that I can work my way up and have a long-term career in.
From people that worked at Severn Trent and online, I always seen there was always good reviews and people would say, like, you can work your way up, you can network, you can basically go into any career you want. They've got, like, apprentices, they've got work experience, the Kickstarter as well, which I actually went into. They're doing it through the job center, they can help schedule the interview, and they can help tell you what you need to get ready for it. You know, they understand that being a mum, kids come first at the end of the day. They also know that I wanna have a career, so the part-time hours, what they did for the Kickstart was really helpful.
I learned a lot doing the Kickstart Scheme that I can carry on into my next role that I'm in now and then hopefully just work my way up and gather more experience as I go along.
Those are just some of the things that we're gonna be doing to help 100,000 people out of poverty by 2032. For the first couple of years of our plan, we're gonna be focusing on one of the most deprived areas on the region, East Birmingham, where average household incomes can be GBP 12,000 compared to GBP 19,000 across England. We're gonna be working with Birmingham City Council as part of the East Birmingham Inclusive Growth Strategy. For some people in that patch, this winter, they're gonna be making a decision between eating and heating, that just simply isn't acceptable, which is why we're so passionate to get going on our plan. It's not gonna be easy. It's not gonna be quick. We've got the commitment, the ambition, and the plans to make it into a reality.
I thought that was a really inspiring video, and I can't wait to share updates on the interventions and activities over the course of the coming few years. With that, it's just for me to summarize today's results presentation. The first thing is we're on track with our investment plans, both core and Green Recovery, and we're now guiding to a 36% nominal RCV growth over the course of the year. Secondly, our operational performance remains strong, and we're on track to be green with about 85% of our measures. Thirdly, our environmental activities continue to be right at the core of our delivery plans. We're doing well with our river pledges, and we're on track for four-star EPA status again this year, fourth year on the bounce.
Lastly, we just launched a really exciting societal strategy that we believe will genuinely make a real difference to the regions in which we live and serve, but actually, as importantly, inspire our colleagues each and every day. We're going to have Q&A back with the whole team shortly, so feel free to get ready and get your questions lined up for us. Thank you very much.